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Asia/South Asia
How rivals are vying to lead the post-Koizumi era in Japan
David Pilling from Tokyo

          Asure way to stump a quiz fanatic is to ask the names of the Japanese prime ministers who shuffled in and out of office in the 1990s. For the record, there were seven of them, including Tsutomu Hata, a former bus company employee who lasted all of two months.
Yet not so many would struggle to name Junichiro Koizumi, whose maverick style and distinctive policy agenda have kept him at the helm of the world's second largest economy for five years. That makes him Japan's third longest-serving prime minister since the second world war and one of the few to command a genuine presence on the world stage.
In that time, he has transformed the political landscape. Eschewing the sake-lubricated backroom deals of old, he has pursued his sometimes quirky policy agenda on the floor of parliament and on the television screens of Japanese homes.
By disregarding the usually accepted wish to form a consensus, he has privatised the gargantuan post office, sent troops to Iraq in the face of Japan's pacifist constitution and articulated a market-led economic agenda. If he has had the luck to be prime minister when the economy finally racked up four years of growth, he has given the impression of making his own good fortune as well as riding it.
Now Mr Koizumi's ride is almost over. In another act that defies convention, he has pledged -- in spite of continuing high popularity after a landslide election victory last autumn -- to make way for his successor in September. The problem is, no one knows who that will be.
The question of who comes after Mr Koizumi is important for the world as well as Japan. Economically, his successor must build on the recovery to tackle the problems of towering debt and an ageing population. Even more important, Japan's next leader will have to seek a way out of the diplomatic dead end into which Mr Koizumi has led it. In the past five years, relations with China -- now Japan's biggest trading partner -- as well as those with South Korea have almost broken down.
Those countries, former victims of Japan's imperial adventurism, have ostracised Mr Koizumi largely because of his annual pilgrimage to Yasukuni shrine, a symbol of Japanese nationalism where millions of soldiers, and some convicted war criminals, are honoured. Few believe that Japan's next leader would be wise simply to allow such bad feelings to fester.
With months to go, it is rash to predict who will run for head of the ruling Liberal Democratic party, and hence prime minister, let alone who will win. No one has officially declared a candidacy. Yet even at this early stage, the issues of how Japan should manage its economy and diplomatic relations are shaping the contest. Kaoru Yosano, economy minister and an astute political observer, says: "I want to hear from all the candidates about their thinking first on diplomatic policy, including Asia, and second on fiscal discipline."
For months, the front-runner has been Shinzo Abe, at 51 considered dashingly young for a would-be leader. With high popular appeal, Mr Abe looks like a natural heir to Mr Koizumi. In opinion polls on prime ministerial quality, Mr Abe, chief cabinet secretary, consistently scores above 40 per cent -- until recently streaks ahead of rivals wallowing in the low single digits.
If this were a popular vote, Mr Abe would be almost home and dry. But it is the Liberal Democrats, not the people, who will pick Japan's next prime minister.
In recent weeks, another potential candidate -- Yasuo Fukuda, from one of the ruling party's most famous families -- has been climbing the polls. In one survey, the 69-year-old former chief cabinet secretary scored 14 per cent, a respectable showing for a non-cabinet minister.
Other expected contenders, including Sadakazu Tanigaki, the technocratic finance minister, and Taro Aso, the aristocratic foreign minister, are still far behind. But they, or other darkhorse candidates, have ample time to make up distance.
Of the two issues on which the contest is likely to hinge, diplomacy is the more unpredictable. Mr Abe owes his popularity to his reputation for standing up for Japan's national interest, particularly in dealings with North Korea. Until recently Mr Abe had stated firmly that the next Japanese leader had every right to follow in Mr Koizumi's footsteps by paying homage at Yasukuni.
On one level, this sentiment taps into the national mood, especially among many younger Japanese who believe the country has apologised enough for events of 60 years ago. The time has come, they say, for Tokyo to resist Chinese bullying in, for example, the incursion of Chinese submarines into Japanese waters and a dispute over gas reserves in the East China Sea.
Yet what had appeared to be Mr Abe's trump card could yet become a liability. Opinion polls show that, despite distrust of China, many Japanese are nervous about antagonising Beijing -- a sentiment that has grown since last year, when anti-Japanese protests erupted in several Chinese cities.
Ttsuneo Watanabe, Japan's most powerful media baron, is pressing for a more honest account of his country's wartime history. And some business leaders have quietly begun lobbying against Mr Abe, whom they fear could worsen relations -- and business opportunities -- with China. Even Washington, which has refrained from criticising Mr Koizumi publicly, has started to express quiet concern about having a reputed hawk as Japan's next leader.
"We have to improve our relations with China and South Korea," says Mr Yosano, the economy minister. "There are many difficulties but China is a reality, China is rising, and we have to face that."
This change of mood plays into the hands of Mr Fukuda, a party elder who is believed to have better relations with Beijing and who has vowed to shun Yasukuni. In a recent speech calculated to polish his diplomatic credentials, he called for updating the Fukuda Doctrine, a policy of conciliation towards the rest of east Asia formulated 30 years ago by his late father Takeo, who was then prime minister.
In spite of an insistence from Mr Abe's camp that Beijing should not be allowed to influence a domestic election, the China question is already having an impact. In a recent interview with the Financial Times, Mr Abe rowed back from his previous, strong line on Yasukuni, saying: "I have no intention whatsoever to make a declaration that I will go to the shrine."
Akihiko Tanaka, a professor at Tokyo University, says China could be decisive in determining Mr Koizumi's successor. Yet he argues that, tone aside, whoever comes next will need to move in broadly the same direction. "Part of the reason for the current abnormal relations stems from the peculiar behaviour of Mr Koizumi, which in my opinion doesn't reflect Japan's broad national interest," he says. "Whoever takes over, the relationship will become more normal."
Prof Tanaka says Mr Abe has some juggling to do, "His challenge is, on the one hand, to keep his image of a disciplined conservative for his original supporters, while assuring the many people in the middle of the road that he will not destroy Japan's relationship with China or South Korea. The opponents of Abe will, of course, emphasise the latter danger."
Economic management is a less obviously explosive issue but is just as important. The main point of debate is how to repair Japan's finances, which deteriorated badly in the 1990s as successive governments tried to stimulate recovery through massive borrowing. Even after five years of attempted austerity from Mr Koizumi, the fiscal deficit runs at about 6.0 per cent of gross domestic product (GDP), while gross outstanding debt has swollen to 160 per cent of GDP, the highest among industrialised nations.
Supporters of Mr Abe have tried to polarise the debate. They have successfully cast potential opponents, particularly the earnest Mr Tanigaki, as fiscal hawks, in too much of a hurry to raise consumption tax.
Mr Abe's followers have suggested Japan should pursue policies to maximise nominal growth -- they estimate that 4.0 per cent a year is attainable -- and to cut spending, particularly within government. Only after, that, they say, should the next administration resort to tax increases.
Mr Abe's implied delay of a tax rise for several years enjoys backing from some economists, who say lifting consumption tax from its current level of 5.0 per cent could smother a nascent recovery in household spending. A delay also looks astute ahead of the upper-house elections, in which the LDP must defend a thin majority.
Mr Tanigaki is shunning expedience. He recently dismissed a suggestion from people in the Abe camp that a tax rise of 3.0 percentage points would be sufficient, saying spending on social security to support the ageing population would require more of an increase.
Mr Fukuda, a former oil executive, has yet to be drawn on the tax issue but is a seasoned enough politician to avoid making unpopular tax increases central to his campaign. Many business people also regard Mr Fukuda as a more capable economic steward than Mr Abe, whom they tend to dismiss as economically illiterate -- a charge that has also been levelled at Mr Koizumi, despite his strong economic record.
Apart from diplomacy and economics, an additional factor could swing events: generation politics. Mr Abe has begun to suffer from a whispering campaign that he is too young to become prime minister.
This stems partly from a fear among older politicians that their generation could be passed over. But even supporters of Mr Abe suggest he might be wiser to wait, allowing a caretaker prime minister to guide the party through next year's tricky elections and prepare the ground for a tax increase.
Ichiro Ozawa, the recently elected leader of the main opposition Democratic Party of Japan, is a wily veteran whom some fear could run rings around the relatively inexperienced Mr Abe. Yet there is an equally strong argument that the Liberal Democrats would be more electable with a charismatic leader rather than the fusty Mr Fukuda.
Mr Abe insists such talk is irrelevant. "I believe seniority means much less," he says, emulating Mr Koizumi's habit of attacking Japan's sacred cows. "What matters is whether a person can bring results."
The final twist in the leadership contest is that both Mr Abe and Mr Fukuda come from the same faction within the Liberal Democrats, which would normally preclude them from running against each other. One of them may yet bow out gracefully.
But Mr Koizumi, one of whose missions has been to smash what he regards as the party's corrosive factions, recently declared factional discipline dead. "If both men wish to run, nothing can stop them," he opined.
If that happens, the spirit of Mr. Koizumi's iconoclasm will have outlasted him -- by helping to determine the identity of his successor.
Under syndication arrangement with FE


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